Using AICPA Sample Evaluation Tables,what Is the Conclusion from a Statistical

question 130

Multiple Choice

Using AICPA sample evaluation tables,what is the conclusion from a statistical sample of internal controls when a sample of 125 documents indicates five deviations if the tolerable rate of deviation is 5 percent,the expected population deviation rate is 2 percent,and the allowance for sampling risk is 3 percent?

• A) Accept the evidence as support for assessing a low control risk because the tolerable rate of deviation less the allowance for sampling risk is less than the expected population deviation rate.
• B) Use the evidence to assess a higher control risk than planned because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.
• C) Use the evidence to assess a higher control risk than planned because tolerable rate of deviation plus the allowance for sampling risk exceeds the expected population deviation rate.
• D) Accept the evidence as support for assessing a low control risk because the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate of deviation.

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Definitions:

Environmental Impact Statement

A document that the National Environmental Policy Act requires federal agencies to prepare in connection with any legislative proposals or proposed actions that will significantly affect the environment.

NEPA

Stands for the National Environmental Policy Act, a U.S. federal law that promotes the enhancement of the environment and establishes the necessary processes for environmental impact statements.

Local Municipality

A city, town, or other district possessing corporate status and usually its own local government within a larger state or nation.

Injection of Wastes

The disposal of waste by pumping it below the earth's surface into porous rock formations.